THE GENESIS OF THE FUNCTIONS OF GOVERNMENT DEBT SECURITIES

Government borrowings appear at a certain stage of development the economic system. Governments used loans many centuries ago because there are often occurred situations when borrowings were the only way to attract additional financial resources. The preconditions for government loans from the position of creditors are also important. These, in particular, include: the availability of subjects that have the temporarily available funds; investor confidence in the state, that stimulating their interest in buying government debt securities; state’s ability to repay its obligations and so on. Thus, the article deals with the basic prerequisites of the government securities market and its function at different stages of develop-ment of economic relations. So, it was found, that the main functions of local borrowing in XIV-XX centuries include the following: fiscal, public debt management, improved economic situation in some areas and repayment of previously issued loans. In modern conditions the functions of government securities have expanded and include: regulation of the money market and stock market, smoothing unevenness of funds flow to the budget, funding various pro-grams, support the liquidity of financial institutions. The author also highlights that objective necessity of using government borrowing associated with the presence of contradictions between the existing needs of society and the state’s capacity to satisfy them within existing financial re-sources. And in such situations government securities are a means of mobilizing additional financial resources to the state budget.